GNYADA October 2018 Newsletter

12 Dealerships Cannot Condition Warranty Coverage on Using Specific Parts or Service

not sold or licensed by [company name]. This warranty does not apply if this product has had the warranty seal on the [product] altered, defaced, or removed.

The Federal Trade Commission (FTC) sent warning letters to six companies, including some that market and sell cars, regarding the companies’ statements that con- sumers must use specific parts or service providers to maintain warranty coverage. The Magnuson-Moss Warranty Act, which governs consumer product warranties, prohibits these statements

unless the warrantors provide parts or service for free or have an FTC waiver. Examples of prohibited lan- guage include: The use of [company name] parts is required to keep your manufac- n

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turer’s warranties and any extended warranties intact.

Dealers should review their warranties to ensure that there is no prohibited language and call GNYADA with any questions.

This warranty shall not apply if this product is used with products

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Be Prepared for Small Claims Cases – a Fact of Life for Dealerships

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Nearly every town, village, county, and borough has a small claims court where plaintiffs can seek money damages – $3,000 in towns and villages, $5,000 in cities and counties – but nothing else. A small claims case suit will start with a letter to the dealer from the court briefly describing the claim and possibly the amount sought. Receiving a Claim Contact your attorney as soon as you receive such a letter. They may not need to do anything yet but can provide input and guidance. Then review and investigate the complaint – look for documents, interview employees, etc. You may also want to contact the plaintiff (your customer) to see if the matter can be resolved outside of court. If you do receive a letter, start collecting supporting documents – photos, agreements, contracts, letters, receipts, checks, invoices, work/repair orders – and make three copies (for yourself, the judge, and the plaintiff). Make sure you are very familiar with the documents. Many times, the party

who comes across as more knowledgeable and convincing is victorious! What to Expect in Court Even though corporations should be represented by counsel, you may be allowed to proceed without if you are an owner, manager, or other witness with written authorization to represent the business. Be on time for the calendar call. When your name is called, loudly say “Defendant ready” if you are seeking arbitration, “Defendant ready by the Court” if you are seeking a judge, or “Defendant application” if you need to adjourn to another date. Each side gets one adjournment, any more require court permission. If only the defendant appears, the case is dismissed. If only the plaintiff appears, the case is decided through an inquest (a one-sided trial) and a judgment is usually entered for the full amount against the defendant. If both parties are present, the plaintiff will testify first – they have the burden of proof. Take notes and write questions to ask later to

contradict their claims since you will have an opportunity to question them. You will testify next and have the opportunity to present documents and witnesses to support your defenses and objections. The judge may or may not allow brief closing statements. The Verdict In most courts, the decision is mailed and arrives 3-5 business days after the hearing. If the defendant wins, the matter is dismissed. If the defendant loses, then a judgment is entered for the amount awarded. If you do not appeal, the judgment must be paid within 30 days. Before appealing, talk to your lawyer since the cost of appealing can exceed the cost of the judgment. This article was prepared by GNYADA allied member Stevan H. LaBonte of the LaBonte Law Group.

Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • October 2018 7